By Dan Kennedy • The press, politics, technology, culture and other passions

A sickening tale of abuse

Kudos to Boston Globe reporter Sean Murphy, who has produced a stomach-churning two-part series (part one; part two) on the phenomenally expensive health-insurance plans that are routinely given to public employees in Massachusetts.

Appalled as I am that state and local employees are having as much as 90 percent of the health-care costs covered by taxpayers, that really pales in comparison to those receiving free health care for serving a few years in part-time, mostly voluntary elected positions.

I’d like to see newspapers and bloggers in every city and town in the follow up by reporting exactly what the situation is in their community.

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  1. Jim Chiavelli

    But, uh, Dan, how does this fit with the meme that you’re a cryptocommunist nonscientist baby-stomper or something?

    Here’s the thing, and I say this, as you know, from far to the right of you: Why, when we see something like this do we say “We need to tear down people with something better than us” rather than “Wouldn’t it be great to get that level of X for everyone?”

    Yes, yes, it’s da unionz screwin’ da little guyz again. Ask yourself: If your employer came to you and said, those benefits you’re getting, I’d like to take them away but I need your permission, would your first thought be: Sure, buddy, here ya go?

    • Dan Kennedy

      @Jim: You raise a very good point, and it’s one I thought about before I posted. My response is that there are certain benefits that are only available to public employees, and two examples of that would be health-care plans that are far more generous than those available anywhere in the private sector, and pensions at a time when virtually the entire private sector has switched to defined-contribution retirement plans. Public employees receive these benefits in return for their activism and their votes. And we taxpayers have to pay for them.

      It’s a dynamic fundamentally different from one private-sector union cutting a better deal for itself than another, and then the other using that as the basis for improving its own situation, no? It’s really a closed system, funded with our tax money.

      What makes it all the more infuriating is that we would all benefit from a true national universal health-care system, such as single-payer. But we are going to fall far short of that, and may get nothing at all.

      Consider that Scott Brown got a lot of votes from people who belong to public-employee unions, and he promised to vote against health care. Well, if you’re a union member, and you’ve been convinced (wrongly) that your health-care costs will go up if Congress enacts health-care reform, then maybe you’d vote for Brown, too.

  2. George Brennan

    Good stuff, Dan, but you should credit the right reporter. It’s Sean Murphy.

    • Dan Kennedy

      @George: Thanks. Now fixed. Age and experience are sometimes an impediment. I know Sean Flynn and Sean Murphy, and somehow a synapse misfired.

  3. BP Myers

    Couple this with the ticking time bomb of one-trillion dollars in unfunded pension liabilities promised to those same “public servants” which Bloomberg reported on last year.

    I notice too that the pigs were able to remove themselves from the trough long enough to post comments to those stories, foisting the old canard that “people take a pay cut” to work in the public sector, which USA Today and others most recently destroyed.

    Of such disparities are revolutions made. I hope I live long enough to see it.

  4. LFNeilson

    Health insurance and pension costs have driven many companies into financial hardship, even bankruptcy. GM is probably the best example. What’s different with cities and towns in Massachusetts is that you probably aren’t going to see them go bankrupt, although the insurance thing may well drive some there. But here’s what you will see: fewer employees hired; reduced services; bunker mentality; increased resentment of employees’ having those benefits, all contributing to societal breakdown. There will be requests to override Prop. 2-1//2, but those generally don’t pass.
    I believe it is possible for a municipality to shake off union control, but it is highly unlikely. Pols who attempt to stand up to union power generally don’t get re-elected. Govt. employee unions are the strongest unions in the country now. There has to be a balance of power, and obviously the pendulum has swung too far.

  5. Ron Newman

    This is another reason why we need a single-payer health system, which would abolish all private health insurance companies and standardize benefits for all people, regardless of who they work for. It would lift an enormous financial burden from cities and towns.

  6. Mike Coughlin

    I think its important to point out that the story largely about the generous benefits provided to many municipal employees, not all public employees. State employees who receive their benefits through the Group Insurance Commission DO NOT enjoy the lucrative benefits described in the Globe piece.

  7. BP Myers

    @Mike said: State employees who receive their benefits through the Group Insurance Commission DO NOT enjoy the lucrative benefits described in the Globe piece.

    It was my understanding through reading these articles that state employees who receive their benefits through the GIC recieve the exact same lucrative benefits, only with higher (but still entirely reasonable) co-pays.

    Perhaps I mis-read something?

  8. Mary DeChillo

    The legislation passed in June, 2007 (allowing municipal unions to engage in “coalition bargaining” as a group and enabling a town to move into the state employees Group Insurance Commission pool of over 250,000 members) was flawed from the beginning. The language of legislation was changed at the end to accommodate the Firefighters union, so that 70% of all municipality union members would have to vote in the affirmative for a change to GIC to be made.

    As the article states, only 25 municipalities have been able to get enough votes to convert to the GIC. As the 3 year anniversary of this law approaches, the fact that only 25 out of 351 municipalities have signed on to save their towns money speaks volumes as to the need to redo the legislation (taking benefits out of collective bargaining) and the utter inability of local officials and the state legislators to stare down the unions.

    The town in which I live did pass this after being among the first to attempt a vote. It took 3 votes of the coalition, 18 months of sporadic negotiation, and a significant concession on the part of the town to pass. In the end, the town/employee split went from 60/40 to 70/30 (a 4 yr. 2.5,2.5,2.5. 2.5 phase in). Ten percent might not
    seem a lot but when you consider the rising cost of primiums and the number of employees and retirees, it is a lot over time.

    The most amazing thing about this negotiation was that it was being carried out against a backdrop of the financial crash of 2007-2008 and when our town had already laid off 45 school employees (mostly teachers). Senior members of the teachers’ union were willing to stand by and watch as junior and untenured members of the faculty receive pink slipped due to budget deficits, all the while they proclaimed their “professionalism” and dismay that class size were to rise because of the loss of the young faculty!
    The teachers union continues to beat the same drum that they received from the Massachusetts Teachers Association. If you listen to most teachers they have bought into the party line and its all about them and how difficult a job they have. They also feel entitled to both the health benefits and the pension, at a time when most workers are lucky to get one of them. They live in an altered sense of reality which the MTA exploits–they work with kids and have little chance to be at the watercooler with other adults talking about adult issues.

    Local officials need to become more active in this isue and not be intimidated by the police, fire, and teacher unions. This is difficult for Selectmen and City Councilors to do because they have to live in the municipalities and worry that their move to “take away” benefits from these public servants(who also live in the municipalities) will result in retribution against them or their families.

  9. Rich Carreiro

    Dan — while you fixed the reporter’s name in the text, the tag on the post still says “Sean Flynn”.

  10. Michael Pahre

    While I would be interested in knowing the health care retirement benefits for former city employees in Boston, that’s a really tall order to ask.

    The Boston Herald should be lauded for getting the payroll and pension records for various state and municipal government employees (see “Your Tax Dollars At Work” on their homepage) onto the web in electronic, searchable format. The Herald is best positioned to extend their existing database to include health care expenses for retired employees.

    The more difficult reporting problem, however, is tying together who on that list is getting reasonable benefits and who is not. Those are case-by-case determinations that probably require access to an extensive database (probably being held by the pension board) listing each person’s years worked, work hours each year, salary each year, and other pension qualifying payments (like the UMass president’s housing allowance… gag, gag).

    That’s hard work. You have to separate out the part-time library board member for 10 years from the career-long civil servant that worked his butt off for mediocre salary for 40 years.

    What is really the problem is that retired public employees are getting generous retirement health benefits when virtually everybody else gets pushed into Medicare. You don’t need to do database searches — or call out former, part-time library board members with generous retirement benefits — to realize that is a benefit that doesn’t make sense.

    And having the employer pay 90% of health care costs? Similarly out-of-line with other sectors of the economy — and in need of a state law to make it a more reasonable 50/50 split (assuming that the state legislature had the balls to pass such a law).

  11. BP Myers

    State employees not only pay higher copays than most city/town employees, they have no access to indemnity plans and have much higher threshholds for receiving retirement benefits. State employees have higher usage rates of less expensive managed care plans.

    The Globe piece has a lot of merit as an indictment of local politics…The GIC is a much better deal for the taxpayer and cities and towns should be able to transfer their employees to it in order to save dollars at the local level.

    But Murphy’s piece should not be taken as proof that all public employees are “pigs at the trough” as you seem to suggest in an earlier post.

    • Dan Kennedy

      @Mike: A quick Google search reveals — as I suspected — that I have never used the phrase “pigs at the trough.”

  12. BP Myers

    Michael Pahre says: And having the employer pay 90% of health care costs? Similarly out-of-line with other sectors of the economy — and in need of a state law to make it a more reasonable 50/50 split (assuming that the state legislature had the balls to pass such a law).

    That the legislature has no qualms ignoring successful initiative petitions, which constitutionally, are supposed to become law within thirty days, yet does not have the courage to stand up to municipal unions, reveals who is really in charge of the state.

    This same legislature, I would add, had no qualms making everyone else in the state pay for their own health care.

  13. BP Myers

    @Mike said: “State employees not only pay higher copays than most city/town employees”

    So they’re paying ten or fifteen bucks as opposed to the five? Sounds like quite the hardship.

    “they have no access to indemnity plans”

    Hilarious. Who does?

    “and have much higher threshholds for receiving retirement benefits.”

    Twenty years as opposed to ten? Another hardship.

    “But Murphy’s piece should not be taken as proof that all public employees are “pigs at the trough” as you seem to suggest in an earlier post.”

    I more than suggested it, but will concede that not all of them are. But the day that the largest employer in the State of Massachusetts is not the State of Massachusetts is the day your arguments may fall on less deaf ears.

  14. Steve Stein

    When I read a discussion like this, I’m reminded of a Jeff Jacoby column a few of weeks ago, decrying the fact that public sector compensation is so high. And I think “unions”.

    The public sector is still pretty highly unionized, in stark contrast to the fading of union influence in the private sector. So in the past 30 years in the private sector, we’ve seen vast increases in productivity, incredible income growth in corporate high eschelons, and little or no increase in real wages for the great majority of working Americans.

    Maybe stronger private sector unions would give private sector workers more parity.

  15. Dan, I was not quoting you but rather another commenter from this same string, BP Meyers. He owned up to it.

    I should have made it more clear.

  16. Michael Wyatt

    The contrast though between private and public unions is obvious though when you look at the management sides. The private sector stands up for itself (right or wrong) while the public sector caves at every opportunity (after all, what would an elected official gain by taking a hard line – ouster, and after all, it’s only “other peoples’ money” he’s trying to save anyway – and in any event, looking at the elected officials’ eligibility for some of these health insurance giveaways, he may very well be benefiting personally).

    If public sector employees are exempt out of Medicare, I have no problem with providing retiree medical benefits at a reasonable definition of retirement. However, it is insane to throw in a freebie of health care from termination date to normal retirement. We’re talking tens of thousands of dollars annually for a benefit that assuming they’re working is being provided by their current employer in most cases.

    However, the definition of “retire” seems to be abused in the public sector to the point that the IRS has actually taken a stand as to legitimate definitions (age 62). I have a real problem with public sector employees getting free or greatly subsidized health care at age 42. As an actuary, the numbers don’t work. Just start looking at the GASB 45 reports now being prepared (government entities are now actually having to quantify what their future promised liabilities are with respect to future health expenditures, rather than recognizing on a “pay as you go” basis). The numbers are staggering.

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